Temporary Job Protection and Productivity Growth in EU Economies

37 Pages Posted: 27 Mar 2011

See all articles by Mirella Damiani

Mirella Damiani

University of Perugia - University of Perugia

Fabrizio Pompei

University of Perugia - Department of Economics

Andrea Ricci

Italian Institute for the Development of Vocational Training of Workers

Date Written: March 23, 2011

Abstract

The present study examines cross-national and sectoral differences in Total Factor Productivity (TFP) in fourteen European countries and ten sectors from 1995 to 2007. The main aim is to ascertain the role of employment protection of temporary contracts on TFP by estimating their effects with a “difference-in-difference” approach. Results show that deregulation of temporary contracts negatively influences the growth rates of TFP in European economies and that, within sectoral analysis, the role of this liberalisation is greater in industries where firms are more used to opening short-term positions. By contrast, in our observation period, restrictions on regular jobs do not cause significant effects on TFP, whereas limited regulation of product markets and higher R&D expenses positively affect efficiency growth.

Keywords: productivity, labour regulation

JEL Classification: O40, O43, O47; J58

Suggested Citation

Damiani, Mirella and Pompei, Fabrizio and Ricci, Andrea, Temporary Job Protection and Productivity Growth in EU Economies (March 23, 2011). Available at SSRN: https://ssrn.com/abstract=1793087 or http://dx.doi.org/10.2139/ssrn.1793087

Mirella Damiani (Contact Author)

University of Perugia - University of Perugia ( email )

Via A. Pascoli
Perugia, Perugia 06123
Italy

Fabrizio Pompei

University of Perugia - Department of Economics ( email )

via Pascoli, 20
PG 06123 Perugia, 06123
Italy

Andrea Ricci

Italian Institute for the Development of Vocational Training of Workers ( email )

Corso d'Italia n. 33
Rome, 00198
Italy

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